Lenders to Asian Colour Coated Ispat Ltd have approved an offer from Sajjan Jindal-led JSW Steel Ltd to acquire the stressed steel company, a person aware of the development said.
The lenders, led by State Bank of India, approved JSW Steel's Rs 1,550-crore offer with an 80% vote share last week, the person said, asking not to be named.
The offers includes an upfront payment to lenders of Rs 1,525 crore and a payment of Rs 25 crore to operational creditors, the person said.
JSW Steel had improved its bid from about Rs 1,200 crore previously. However, even the revised bid means lenders would have to take a haircut of about 75% considering that Asian Colour had total outstanding debt of more than Rs 6,000 crore towards its financial creditors. The haircut for operational creditors will be even more considering the company owed them over Rs 500 crore.
Asian Colour is part of the second list of 28 corporate defaulters listed by the Reserve Bank of India (RBI) to be referred for resolution under Insolvency and Bankruptcy Code.
Apart from SBI, other lenders to the steel products maker include Bank of Baroda, Punjab National Bank and IDBI Bank.
The company had filed for insolvency in July 2018, after which the National Company Law Tribunal admitted a resolution application filed by SBI.
Gurugram-based Asian Colour has manufacturing facilities near Delhi and Mumbai, and caters to markets across West Asia, Europe, Africa, Latin America and North America, besides India.
On its part, JSW has been looking to acquire stressed assets. In July 2018, JSW Steel and private equity firm AION Capital had acquired cash-strapped Monnet Ispat and Energy Ltd for Rs 2,850 crore. The debt-laden steel company was one of the 12 corporate defaulters from the first list of the RBI.